EU Warns Italy Over Powers That Foiled Banco BPM Deal

The European Union fired a warning shot to Italy over so-called Golden Powers used to thwart UniCredit SpA’s aborted takeover of Banco BPM SpA, ramping up a power struggle between Brussels and Rome amid the bloc’s push for banking consolidation.

The European Commission said Friday it started a formal infringement process, telling the Italian government that its interference in the banking industry broke EU law and also trampled on the European Central Bank’s supervisory role. The EU’s executive arm gave Rome two months to respond to a “letter of formal notice,” the first stage in a process that could wind up in the EU Court of Justice in Luxembourg.